WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - 2012 FOURTH QUARTER AND YEAR-END EARNINGS PACKAGE

Attached files

file	filename
8-K - FORM 8-K - WESTAR ENERGY INC /KS	wr_12312012-earningsreleas.htm
EX-99.3 - 2013 EARNINGS GUIDANCE - WESTAR ENERGY INC /KS	a123120128-kexhibit993.htm
EX-99.1 - PRESS RELEASE DATED FEBRUARY 28, 2013 - WESTAR ENERGY INC /KS	a123120128-kexhibit991.htm

Exhibit 99.2

Westar Energy, Inc.

Fourth Quarter and Year-end 2012 Earnings

Released February 28, 2013



Contents	Page

Consolidated Statements of Income	1
Consolidated Balance Sheets	3
Consolidated Statements of Cash Flows	4
Earnings Variances	5
Supplemental Data	7
Capitalization & Long-Term Debt Table	9
GAAP to Non-GAAP Reconciliation	10
Supplemental Slides	11

Bruce Burns

Director Investor Relations

785-575-8227

bruce.burns@WestarEnergy.com

NOTE:

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K for the period ended December 31, 2012 should be read in conjunction with this financial information. The enclosed statements have been prepared for the purpose of providing information concerning the Company and not in connection with any sale, offer for sale, or solicitation to buy any securities.

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)



	Three Months Ended December 31,
	2012			2011			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	148,494		$	136,604		$	11,890		8.7
Commercial	146,839			134,175			12,664			9.4
Industrial	90,873			79,379			11,494			14.5
Other retail	(6,970		)	(205		)	(6,765		)	nm
Total Retail Revenues	379,236			349,953			29,283			8.4
Wholesale	87,387			89,752			(2,365		)	(2.6	)
Transmission	49,317			39,158			10,159			25.9
Other	7,832			7,365			467			6.3
Total Revenues	523,772			486,228			37,544			7.7
OPERATING EXPENSES:
Fuel and purchased power	137,150			144,096			(6,946		)	(4.8	)
Operating and maintenance	151,356			145,323			6,033			4.2
Depreciation and amortization	65,823			71,771			(5,948		)	(8.3	)
Selling, general and administrative	61,668			52,463			9,205			17.5
Total Operating Expenses	415,997			413,653			2,344			0.6
INCOME FROM OPERATIONS	107,775			72,575			35,200			48.5
OTHER INCOME (EXPENSE):
Investment earnings	955			3,046			(2,091		)	(68.6	)
Other income	8,136			441			7,695			nm
Other expense	(5,740		)	(4,445		)	(1,295		)	(29.1	)
Total Other Income (Expense)	3,351			(958		)	4,309			449.8
Interest expense	44,451			41,779			2,672			6.4
INCOME BEFORE INCOME TAXES	66,675			29,838			36,837			123.5
Income tax expense	18,980			8,532			10,448			122.5
NET INCOME	47,695			21,306			26,389			123.9
Less: Net income attributable to noncontrolling interests	2,088			1,729			359			20.8
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	45,607			19,577			26,030			133.0
Preferred dividends	—			242			(242		)	(100.0	)
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	45,607		$	19,335		$	26,272		135.9
Earnings per common share, basic	$	0.36		$	0.16		$	0.20		125.0
Average equivalent common shares outstanding	126,929			121,880			5,049			4.1
DIVIDENDS DECLARED PER COMMON SHARE	$	0.33		$	0.32		$	0.01		3.1
Effective income tax rate	28.47		%	28.59		%

nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 1

Westar Energy, Inc.

Consolidated Statements of Income

(Unaudited)



	Twelve Months Ended December 31,
	2012			2011			Change			% Change
	(In Thousands, Except Per Share Amounts)
REVENUES:
Residential	$	714,562		$	693,388		$	21,174		3.1
Commercial	640,654			604,626			36,028			6.0
Industrial	368,909			347,881			21,028			6.0
Other retail	(5,845		)	(8,964		)	3,119			34.8
Total Retail Revenues	1,718,280			1,636,931			81,349			5.0
Wholesale	316,353			346,948			(30,595		)	(8.8	)
Transmission	193,797			154,569			39,228			25.4
Other	33,040			32,543			497			1.5
Total Revenues	2,261,470			2,170,991			90,479			4.2
OPERATING EXPENSES:
Fuel and purchased power	589,990			630,793			(40,803		)	(6.5	)
Operating and maintenance	612,871			557,752			55,119			9.9
Depreciation and amortization	270,464			285,322			(14,858		)	(5.2	)
Selling, general and administrative	226,012			184,695			41,317			22.4
Total Operating Expenses	1,699,337			1,658,562			40,775			2.5
INCOME FROM OPERATIONS	562,133			512,429			49,704			9.7
OTHER INCOME (EXPENSE):
Investment earnings	7,411			9,301			(1,890		)	(20.3	)
Other income	35,378			8,652			26,726			308.9
Other expense	(19,987		)	(18,398		)	(1,589		)	(8.6	)
Total Other Income (Expense)	22,802			(445		)	23,247			nm
Interest expense	176,337			172,460			3,877			2.2
INCOME BEFORE INCOME TAXES	408,598			339,524			69,074			20.3
Income tax expense	126,136			103,344			22,792			22.1
NET INCOME	282,462			236,180			46,282			19.6
Less: Net income attributable to noncontrolling interests	7,316			5,941			1,375			23.1
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.	275,146			230,239			44,907			19.5
Preferred dividends	1,616			970			646			66.6
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	273,530		$	229,269		$	44,261		19.3
Earnings per common share, basic	$	2.15		$	1.95		$	0.20		10.3
Average equivalent common shares outstanding	126,712			116,891			9,821			8.4
DIVIDENDS DECLARED PER COMMON SHARE	$	1.32		$	1.28		$	0.04		3.1
Effective income tax rate	30.87		%	30.44		%

nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 2

Westar Energy, Inc.

Consolidated Balance Sheets

(Dollars in Thousands, Except Par Values)

(Unaudited)



	December 31, 2012		December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,829	$	3,539
Restricted Cash	573		—
Accounts receivable, net of allowance for doubtful accounts of $4,916 and $7,384, respectively	224,439		226,428
Fuel inventory and supplies	249,016		229,118
Taxes receivable	—		5,334
Deferred tax assets	—		394
Prepaid expenses	15,847		13,078
Regulatory assets	114,895		123,818
Other	32,476		31,876
Total Current Assets	643,075		633,585
PROPERTY, PLANT AND EQUIPMENT, NET	7,013,765		6,411,922
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET	321,975		333,494
OTHER ASSETS:
Regulatory assets	887,777		922,272
Nuclear decommissioning trust	150,754		130,270
Other	247,885		251,308
Total Other Assets	1,286,416		1,303,850
TOTAL ASSETS	$	9,265,231	$	8,682,851
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt of variable interest entities	$	25,942	$	28,114
Short-term debt	339,200		286,300
Accounts payable	180,825		187,428
Accrued dividends	41,743		40,463
Accrued taxes	58,624		52,451
Accrued interest	77,891		77,437
Regulatory liabilities	37,557		40,857
Other	84,359		114,237
Total Current Liabilities	846,141		827,287
LONG-TERM LIABILITIES:
Long-term debt, net	2,819,271		2,491,109
Long-term debt of variable interest entities, net	222,743		249,283
Deferred income taxes	1,197,837		1,110,463
Unamortized investment tax credits	191,512		164,175
Regulatory liabilities	285,618		230,530
Accrued employee benefits	564,870		592,617
Asset retirement obligations	152,648		142,508
Other	74,336		74,138
Total Long-Term Liabilities	5,508,835		5,054,823
COMMITMENTS AND CONTINGENCIES (See Notes 13 and 15)
EQUITY:
Westar Energy, Inc. Shareholders’ Equity:
Cumulative preferred stock, par value $100 per share; authorized 600,000 shares; issued and outstanding zero shares and 214,363 shares, respective to each date	—		21,436
Common stock, par value $5 per share; authorized 275,000,000 shares; issued and outstanding 126,503,748 shares and 125,698,396 shares, respective to each date	632,519		628,492
Paid-in capital	1,656,972		1,639,503
Retained earnings	606,649		501,216
Total Westar Energy, Inc. Shareholders’ Equity	2,896,140		2,790,647
Noncontrolling Interests	14,115		10,094
Total Equity	2,910,255		2,800,741
TOTAL LIABILITIES AND EQUITY	$	9,265,231	$	8,682,851

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 3

Westar Energy, Inc.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)



	Twelve Months Ended December 31,
	2012			2011
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	282,462		$	236,180
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	270,464			285,322
Amortization of nuclear fuel	24,369			21,151
Amortization of deferred regulatory gain from sale leaseback	(5,495		)	(5,495		)
Amortization of corporate-owned life insurance	28,792			25,650
Non-cash compensation	7,255			8,422
Net changes in energy marketing assets and liabilities	(372		)	926
Net deferred income taxes and credits	126,248			111,723
Stock-based compensation excess tax benefits	(1,698		)	(1,180		)
Allowance for equity funds used during construction	(11,706		)	(5,550		)
Gain on sale of non-utility investment	—			(7,246		)
Gain on settlement of contractual obligations with former officers	—			(22,039		)
Changes in working capital items:
Accounts receivable	2,408			(1,638		)
Fuel inventory and supplies	(19,227		)	(21,485		)
Prepaid expenses and other	(3,630		)	(50,138		)
Accounts payable	(19,161		)	3,008
Accrued taxes	11,937			18,633
Other current liabilities	(105,169		)	(107,012		)
Changes in other assets	13,015			(10,167		)
Changes in other liabilities	(1,386		)	(16,369		)
Cash Flows from Operating Activities	599,106			462,696
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(810,209		)	(697,451		)
Purchase of securities within trusts	(20,473		)	(49,737		)
Sale of securities within trusts	21,604			47,534
Proceeds from trust	2,022			—
Investment in corporate-owned life insurance	(18,404		)	(19,214		)
Proceeds from investment in corporate-owned life insurance	33,542			1,295
Proceeds from federal grant	4,775			8,561
Investment in affiliated company	(8,669		)	(1,943		)
Proceeds from sale of non-utility investments	—			9,246
Other investing activities	(1,525		)	193
Cash Flows used in Investing Activities	(797,337		)	(701,516		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	52,900			54,081
Proceeds from long-term debt	541,374			—
Retirements of long-term debt	(220,563		)	(371		)
Retirements of long-term debt of variable interest entities	(28,114		)	(30,159		)
Repayment of capital leases	(2,679		)	(2,233		)
Borrowings against cash surrender value of corporate-owned life insurance	67,791			67,562
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(34,838		)	(3,421		)
Stock-based compensation excess tax benefits	1,698			1,180
Preferred stock redemption	(22,567		)	—
Issuance of common stock	6,996			294,942
Distributions to shareholders of noncontrolling interests	(3,295		)	(1,917		)
Cash dividends paid	(158,182		)	(138,233		)
Cash Flows from Financing Activities	200,521			241,431
NET INCREASE IN CASH AND CASH EQUIVALENTS	2,290			2,611
CASH AND CASH EQUIVALENTS:
Beginning of period	3,539			928
End of period	$	5,829		$	3,539

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 4

Westar Energy, Inc.

4th Quarter 2012 vs. 2011

Earnings Variances

Change

($ per share)

(Dollars in Thousands)

($ per share)

2011 earnings attributable to common stock

19,335

0.16

Favorable/(Unfavorable)

Retail

29,283

Wholesale

(2,365

)

Transmission

10,159

Other revenues

467

Fuel and purchased power

6,946

SPP network transmission costs

(8,864

)

Gross Margin

35,626

Operating and maintenance w/o SPP NITS

2,831

Depreciation and amortization

5,948

Selling, general and administrative

(9,205

)

Other income (expense)

4,309

Interest expense

(2,672

)

Income tax expense

(10,448

)

Net income attributable to noncontrolling interests

(359

)

Preferred dividends

242

Change in shares outstanding

(0.02

)

2012 earnings attributable to common stock

45,607

0.36

Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)

Due principally to increased average retail prices (see page 7 for changes by customer class)

Due to decreased demand; MWh sales decreased 3% (see page 7 for changes by customer class)

Due principally to collecting less-than-estimated fuel and purchased power expense in revenue

Due primarily to lower costs at Wolf Creek -- $3.3M

Due to reduced depreciation rates to reflect changes in the estimated useful lives of some of our assets

Due primarily to higher pension and other employee benefit costs -- ($6.4M); a contribution to our charitable organization -- ($3.5M)

Due primarily to COLI proceeds -- $4.7M

Due primarily to increased pretax income before operations

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 5

Westar Energy, Inc.

YTD December 2012 vs. 2011



Earnings Variances
				Change
		($ per share)		(Dollars in Thousands)				($ per share)
2011 earnings attributable to common stock				$	229,269			$	1.95

		Favorable/(Unfavorable)

	Retail			81,349			A
	Wholesale			(30,595		)	B
	Transmission			39,228
	Other revenues			497
	Fuel and purchased power			40,803			C
	SPP network transmission costs			(34,383		)
	Gross Margin			96,899
	Operating and maintenance w/o SPP NITS			(20,736		)	D
	Depreciation and amortization			14,858			E
	Selling, general and administrative			(41,317		)	F
	Other income (expense)			23,247			G
	Interest expense			(3,877		)
	Income tax expense			(22,792		)	H
	Net income attributable to noncontrolling interests			(1,375		)
	Preferred dividends			(646		)
	Change in shares outstanding	(0.18	)

2012 earnings attributable to common stock				$	273,530			$	2.15

	Major factors influencing the period to period change in EPS -- Favorable/(Unfavorable)
A	Due to increased average retail prices (see page 8 for changes by customer class)

B	Due primarily to decreased demand; MWh sales decreased 6% (see page 8 for changes by customer class)

C	Due principally to decreased MWhs generated

D	Due principally to increased property tax expense (this is largely offset in revenues through property tax surcharge) -- ($9.2M); increased tree trimming expense -- ($5.9M); higher costs at Wolf Creek -- ($4.6M);

E	Due to reduced depreciation rates to reflect changes in the estimated useful lives of some of our assets

F	Due primarily to reversing accruals as a result of legal settlements in 2011 ($22.0M); higher pension and other employee benefit costs -- ($20.2M); higher transition costs as a result of sustainable cost reduction activities -- ($4.5M); lower legal costs related to arbitration claim in 2011 -- $9.4M

G	Due primarily to COLI proceeds -- $17.4M; increased equity AFUDC related to construction activity -- $6.2M; additional sales of oil inventory -- $3.1M

H	Due primarily to increased pretax income from operations

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 6

Westar Energy, Inc.

Revenue, Sales and Energy Supply



Supplemental Data	Three Months Ended December 31,
	2012			2011			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	148,494		$	136,604		$	11,890		8.7
Commercial	146,839			134,175			12,664			9.4
Industrial	90,873			79,379			11,494			14.5
Other retail	3,125			3,046			79			2.6
Provision for rate refunds	(10,095		)	(3,251		)	(6,844		)	(210.5	)
Total Retail Revenues	379,236			349,953			29,283			8.4
Tariff-based wholesale	62,718			60,218			2,500			4.2
Market-based wholesale	24,669			29,534			(4,865		)	(16.5	)
Transmission	49,317			39,158			10,159			25.9
Other	7,832			7,365			467			6.3
Total Revenues	$	523,772		$	486,228		$	37,544		7.7


Electricity Sales	(Thousands of MWh)
Residential	1,371			1,407			(36		)	(2.6	)
Commercial	1,740			1,748			(8		)	(0.5	)
Industrial	1,372			1,285			87			6.8
Other retail	21			22			(1		)	(4.5	)
Total Retail	4,504			4,462			42			0.9
Tariff-based wholesale	1,354			1,393			(39		)	(2.8	)
Market-based wholesale	974			1,015			(41		)	(4.0	)
Total wholesale	2,328			2,408			(80		)	(3.3	)
Total Electricity Sales	6,832			6,870			(38		)	(0.6	)

	(Dollars per MWh)
Total retail	$	84.20		$	78.43		$	5.77		7.4
Tariff-based wholesale	$	46.32		$	43.23		$	3.09		7.1
Market-based wholesale	$	25.33		$	29.10		$	(3.77	)	(13.0	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	115,115		$	119,413		$	(4,298	)	(3.6	)
Purchased power	26,343			18,566			7,777			41.9
Subtotal	141,458			137,979			3,479			2.5
RECA recovery and other	(4,308		)	6,117			(10,425		)	(170.4	)
Total fuel and purchased power expense	$	137,150		$	144,096		$	(6,946	)	(4.8	)

Electricity Supply	(Thousands of MWh)
Generated - Gas	55			82			(27		)	(32.9	)
Coal	4,842			5,198			(356		)	(6.8	)
Nuclear	1,253			1,248			5			nm
Wind	100			128			(28		)	(21.9	)
Subtotal electricity generated	6,250			6,656			(406		)	(6.1	)
Purchased	865			565			300			53.1
Total Electricity Supply	7,115			7,221			(106		)	(1.5	)

	(Dollars per MWh)
Average cost of fuel used for generation	$	18.42		$	17.94		$	0.48		2.7
Average cost of purchased power	$	30.45		$	32.86		$	(2.41	)	(7.3	)
Average cost of fuel and purchased power	$	19.88		$	19.11		$	0.77		4.0


Degree Days				2011/
	2012			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	44			52			(8		)	(15.4	)
Actual compared to 20 year average	44			39			5			12.8
Heating
Actual compared to last year	1,651			1,691			(40		)	(2.4	)
Actual compared to 20 year average	1,651			1,809			(158		)	(8.7	)
nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 7

Westar Energy, Inc.

Revenue, Sales and Energy Supply



Supplemental Data	Twelve Months Ended December 31,
	2012			2011			Change			% Change
Revenues	(Dollars In Thousands)
Residential	$	714,562		$	693,388		$	21,174		3.1
Commercial	640,654			604,626			36,028			6.0
Industrial	368,909			347,881			21,028			6.0
Other retail	12,374			12,252			122			1.0
Provision for rate refunds	(18,219		)	(21,216		)	2,997			14.1
Total Retail Revenues	1,718,280			1,636,931			81,349			5.0
Tariff-based wholesale	261,375			265,360			(3,985		)	(1.5	)
Market-based wholesale	54,978			81,588			(26,610		)	(32.6	)
Transmission	193,797			154,569			39,228			25.4
Other	33,040			32,543			497			1.5
Total Revenues	$	2,261,470		$	2,170,991		$	90,479		4.2


Electricity Sales	(Thousands of MWh)
Residential	6,684			6,986			(302		)	(4.3	)
Commercial	7,581			7,573			8			0.1
Industrial	5,588			5,589			(1		)	nm
Other retail	85			88			(3		)	(3.4	)
Total Retail	19,938			20,236			(298		)	(1.5	)
Tariff-based wholesale	5,643			5,883			(240		)	(4.1	)
Market-based wholesale	2,076			2,332			(256		)	(11.0	)
Total wholesale	7,719			8,215			(496		)	(6.0	)
Total Electricity Sales	27,657			28,451			(794		)	(2.8	)

	(Dollars per MWh)
Total retail	$	86.18		$	80.89		$	5.29		6.5
Tariff-based wholesale	$	46.32		$	45.11		$	1.21		2.7
Market-based wholesale	$	26.48		$	34.99		$	(8.51	)	(24.3	)


Fuel and Purchased Power	(Dollars In Thousands)
Fuel used for generation	$	489,268		$	556,771		$	(67,503	)	(12.1	)
Purchased power	103,902			91,851			12,051			13.1
Subtotal	593,170			648,622			(55,452		)	(8.5	)
RECA recovery and other	(3,180		)	(17,829		)	14,649			82.2
Total fuel and purchased power expense	$	589,990		$	630,793		$	(40,803	)	(6.5	)

Electricity Supply	(Thousands of MWh)
Generated - Gas	2,238			2,305			(67		)	(2.9	)
Coal	18,691			21,184			(2,493		)	(11.8	)
Nuclear	3,894			3,440			454			13.2
Wind	438			454			(16		)	(3.5	)
Subtotal electricity generated	25,261			27,383			(2,122		)	(7.7	)
Purchased	3,935			2,680			1,255			46.8
Total Electricity Supply	29,196			30,063			(867		)	(2.9	)

	(Dollars per MWh)
Average cost of fuel used for generation	$	19.37		$	20.33		$	(0.96	)	(4.7	)
Average cost of purchased power	$	26.40		$	34.27		$	(7.87	)	(23.0	)
Average cost of fuel and purchased power	$	20.32		$	21.58		$	(1.26	)	(5.8	)


Degree Days				2011/
	2012			20 yr Avg			Change			% Change
Cooling
Actual compared to last year	2,140			2,118			22			1.0
Actual compared to 20 year average	2,140			1,624			516			31.8
Heating
Actual compared to last year	3,688			4,801			(1,113		)	(23.2	)
Actual compared to 20 year average	3,688			4,678			(990		)	(21.2	)
nm - not meaningful

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 8

Westar Energy, Inc.



Capitalization
		December 31, 2012					December 31, 2011
		(Dollars in Thousands)
Current maturities of long-term debt of VIEs		$	25,942				28,114
Long-term debt, net		2,819,271					2,491,109
Long-term debt of variable interest entities, net		222,743					249,283
Total debt		3,067,956			51.4	%	2,768,506			49.7	%
Preferred		—			—	%	21,436			0.4	%
Common equity		2,896,140			48.4	%	2,769,211			49.7	%
Noncontrolling interests		14,115			0.2	%	10,094			0.2	%
Total capitalization		$	5,978,211		100.0	%	$	5,569,247		100.0	%

GAAP Book value per share		$	22.89				$	22.03
Period end shares outstanding (in thousands)		126,504					125,698

Outstanding Long-Term Debt

	CUSIP	December 31, 2012					December 31, 2011
Westar Energy:		(Dollars in Thousands)
First Mortgage Bond series:
6.00% Series due July 2014	95709TAA8	$	250,000				$	250,000
5.15% Series due January 2017	95709TAB6	125,000					125,000
5.95% Series due January 2035	95709TAC4	125,000					125,000
5.10% Series due July 2020	95709TAD2	250,000					250,000
5.875% Series due July 2036	95709TAE0	150,000					150,000
6.10% Series due May 2047	95709T704	—					150,000
8.625% Series due December 2018	95709TAG5	300,000					300,000
4.125% Series due December 2042	95709TAH3	550,000					—
		1,750,000					1,350,000
Pollution control bond series:
Variable series due April 2032 (St Marys)	792609AF6	45,000					45,000
Variable series due April 2032 (Wamego)	933623BN9	30,500					30,500
5.0% Series due February 2033 (Wamego)	933623BQ2	—					57,245
		75,500					132,745
Total Westar Energy		1,825,500					1,482,745

KGE
First mortgage bond series:
6.53% Series due December 2037	485260BJ1	175,000					175,000
6.15% Series due May 2023	485260B@1	50,000					50,000
6.64%Series due May 2038	485260B#9	100,000					100,000
6.70%Series due June 2019	U24448AB5	300,000					300,000
		625,000					625,000
Pollution control bond series:
5.10% Series due March 2023	502828AH9	—					13,318
Variable rate series due April 2027 (LaCygne)	502828AJ5	21,940					21,940
5.3% Series due June 2031	121825BW2	108,600					108,600
5.3% Series due June 2031	933623BR0	18,900					18,900
Variable rate series due April 2032 (St Marys)	792609AE9	14,500					14,500
Variable rate series due April 2032 (Wamego)	933623BM1	10,000					10,000
4.85% Series due June 2031	121825CB7	50,000					50,000
5.6% Series due June 2031	121825CD3	50,000					50,000
6.0% Series due June 2031	121825CE1	50,000					50,000
5.0% Series due June 2031	121825CF8	50,000					50,000
		373,940					387,258
Total KGE		998,940					1,012,258

Total long-term debt		2,824,440					2,495,003
Unamortized debt discount		(5,169		)			(3,894		)
Long-term debt due within one year		—					—
Total long-term debt, net		$	2,819,271				$	2,491,109

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 9

Westar Energy, Inc.

GAAP to Non-GAAP Reconciliation

Fuel and purchased power costs fluctuate with electricity sales and unit costs. As permitted by regulators, prices are adjusted to reflect changes in the costs of fuel and purchased power. Fuel and purchased power costs for wholesale customers are recovered at prevailing market prices or based on a predetermined formula with a price adjustment approved by FERC. As a result, changes in fuel and purchased power costs are offset in revenues with minimal impact on net income. For this reason, Westar management believes that gross margin is useful for understanding and analyzing changes in operating performance from one period to the next. Gross margin is calculated as total revenues, including transmission revenues, less the sum of fuel and purchased power costs and amounts billed by the SPP for network transmission costs (SPP NITS). Accordingly, gross margin reflects transmission revenues and costs on a net basis. However, transmission costs are recorded as operating and maintenance expense on Westar's consolidated statements of income.

The calculations of gross margin and operating and maintenance expense w/o SPP NITS for the three and twelve months ended 2012 and 2011 are shown in the table below. The table also includes a reconciliation of gross margin to income from operations for both periods. Income from operations is the GAAP financial measure most directly comparable to gross margin. Operating and maintenance expense is the GAAP financial measure most directly comparable to operating and maintenance expense w/o SPP NITS.



	Three Months Ended December 31,							Twelve Months Ended December 31,
	2012		2011		Change			2012		2011		Change
	(Dollars in Thousands)
Revenues	523,772		486,228		37,544			2,261,470		2,170,991		90,479
Less: Fuel and purchased power expense	137,150		144,096		(6,946		)	589,990		630,793		(40,803		)
SPP network transmission costs	42,405		33,541		8,864			166,547		132,164		34,383
Gross Margin	$	344,217	$	308,591	$	35,626		$	1,504,933	$	1,408,034	$	96,899

Gross margin	$	344,217	$	308,591	$	35,626		$	1,504,933	$	1,408,034	$	96,899
Add: SPP network transmission costs	42,405		33,541		8,864			166,547		132,164		34,383
Less: Operating and maintenance expense	151,356		145,323		6,033			612,871		557,752		55,119
Depreciation and amortization expense	65,823		71,771		(5,948		)	270,464		285,322		(14,858		)
Selling, general and administrative expense	61,668		52,463		9,205			226,012		184,695		41,317
Income from operations	$	107,775	$	72,575	$	35,200		$	562,133	$	512,429	$	49,704

Operating and maintenance expense	$	151,356	$	145,323	$	6,033		$	612,871	$	557,752	$	55,119
Less: SPP network transmission costs	42,405		33,541		8,864			166,547		132,164		34,383
Operating and maintenance expense w/o SPP NITS	$	108,951	$	111,782	$	(2,831	)	$	446,324	$	425,588	$	20,736

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 10

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 11

The Notes to the Consolidated Financial Statements in the company's Annual Report on Form 10-K

for the period ended December 31, 2012 should be read in conjunction with this financial information.

Page 12

WESTAR ENERGY INC /KS - FORM 8-K - EX-99.2 - 2012 FOURTH QUARTER AND YEAR-END EARNINGS PACKAGE - February 28, 2013

Attached files

WESTAR ENERGY INC /KS Reports